Climate

As U.S. EPA moves forward with regulations for new and existing power plants, how could these rules affect existing carbon markets? During today's OnPoint, Yves-François Blanchet, Quebec's minister for sustainable development and the environment, discusses the potential impact of the air regulations on Quebec's anticipated linkage with California's carbon market. He also discusses the progress being made to create a larger international trading system.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Yves-François Blanchet, Quebec's minister for sustainable development and the environment. Minister, it's great to have you back on the show.

Yves-François Blanchet: It's always a pleasure.

Monica Trauzzi: Since you were last here in May, the U.S. EPA has moved to propose air regulations for new power plants, and we're also expecting to see a plan released for existing power plants in early 2014. How do you believe these actions by the federal government could impact the cap-and-trade plans that California has with Quebec?

Yves-François Blanchet: That specifically will have to be dealt between California and the United States, the federal government, but what I believe is that the, let's say the level of an average agreement that could be accepted throughout the whole country is probably lower as a standard than what the cap-and-trade system and the intention of the Californian government did implement. So, it is a good step but it's not any higher than what is being put forward by both California and Quebec government.

Monica Trauzzi: Are you concerned at all that you may be asked to tweak what you're doing and perhaps lower your standards?

Yves-François Blanchet: I do not think so. I believe that California will hold on to its standards, as it did in similar issues in the past. And as for Quebec, we tend to be some leaders in the environmental issues, and we intend to stick to what we have decided. The only thing I believe that could lead us to open parts of the agreement would be some major new players saying, "We want to be part of it, but we would like to discuss a few items in the agreement, in the treaty." So, we would probably be more open under those circumstances, but this would be because the cap-and-trade system would welcome new jurisdictions, new provinces or states.

Monica Trauzzi: So you're in town this week for the Carbon Forum North America Conference. When you consider the policy and regulatory discussions happening in the United States right now relating to carbon, how does the U.S. compare to other countries?

Yves-François Blanchet: One of the main observations I could make about the debate, which is going on almost all over the planet, is that each jurisdiction tries to define its own way to do it, some with the carbon tax, some with the limited cap-and-trade system and some very large projects like they did in Europe. But everybody is coming back to the idea that something has to be done. I would say many years ago there was this big dream of one global market to deal with the carbon issue. It did not last; it collapsed quite rapidly, but now we might be getting back on such a track, because perhaps there's no other real valid solution to what is being presented to us day after day as the consequences of not having been able to react rapidly enough.

Monica Trauzzi: So do you think that the UNFCCC's talks have new life to them now?

Yves-François Blanchet: I believe that what we have seen in the last few days is not once and for all, because there will always be people saying that it's not true, but the debate about is there climate change or not should be over. Nobody serious could say that it does not happen. It does happen. Now we could invest our energies into finding solution, finding agreements and not spending one large conference after another without any concrete results and keeping seeing the situation getting worse and worse. It is about to get out of hand. It is about to reach a point where more soft solutions like we are trying to implement now will be enough in order to deal with the situation. So, I hope the international community will wake up.

Monica Trauzzi: So let's get into some specifics about the Quebec-California linkage. What progress has been made on the offsets discussion?

Yves-François Blanchet: Actually, when the governor of California, Mr. Brown, went to his legislative Assembly about the plan, he was asked to adapt a few things, which was done, and it did ask from us to do some slight changes also, after which we signed. Actually, the agreement was signed one week ago, and now we are just waiting for the actual linkage to happen on January the 1st.

Monica Trauzzi: And are you on track to hit that date? Are there potential hurdles that could get in the way?

Yves-François Blanchet: Everything seems to be OK. There is no problem on the road. Everybody is well-informed. Of course they will be. Along the way, there will be parts of it and details which will not work as we want or expect them to, and it's absolutely normal. We did base the drafting of our agreement on some mistakes that were done before ours, and I guess that the next level of such agreements will be inspired by what we did well and what we did not so well. It is normal that it will come to need some adjustments, and I'm absolutely open to those adjustments, because we always need to do better.

Monica Trauzzi: So, California's looking internationally now for partners, and recently Gov. Jerry Brown signed an agreement with the Chinese to work on emissions trading. So what's your take on what that step means for the future of a larger scheme?

Yves-François Blanchet: We have been looking at some initiatives being discussed, more often discussed than really implemented in many countries, each one having its own way to see it and trying to go forward with something and meeting some reluctance, some resistance here and there. But each step which is accomplished brings us to more and more compatibility between the different ways to see this. And if I would have to, but I don't have such an audience, but if I would have to, I would ask all those people to remain as simple as possible in the way they draft the agreements within their countries or with other countries, because at the end of the day, when we will start joining those markets in order to create a larger one, which will be more efficient, the lesser the differences, the easier the job will be.

Monica Trauzzi: We're going to end it right there, Minister Blanchet. Thank you for coming on the show.

Yves-François Blanchet: It's been a pleasure again.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow. Wonderful. Thank you so much.